Dow 15,000 by Year End, Says Professor Siegel

Jeremy Siegel, Wharton professor of finance, explains how the current GDP report bodes well for stocks, and why he believes the bull market still has legs to run.

The Dow Jones Industrial Average could hit 15,000 "definitely" by the end of the year, and there's a "very strong possibility" it could go even higher, Wharton School Professor Jeremy Siegel told CNBC on Thursday.

About 70 percent of S&P 500 index component firms are beating estimates, despite the first negative gross domestic product report in more than three years, Siegel said in a "Squawk Box" interview.

Siegel argued that the recent strength in the stock market has come without major buy-in from individual investors. "The public is just barely touching its toe in the market. We had huge redemptions on stock mutual funds in December. And a little bit of an increase so far in January. So the public isn't really in [yet]."

As for GDP, Siegel predicted three percent growth in 2013 is possible. "You're going to see consumers spending ... to begin to loosen those [purse] strings."

With the borrowing limit issue off the table for now, President Barack Obama and Republican leaders can concentrate on new funding to keep the government running and a replacement for the postponed across-the-board spending cuts known as "the sequester."

"I don't think we're going to have a shutdown of the government. We may have some sequestration."

Any economic headwind from those broad spending cuts would be more than offset by the recovering housing market, Siegel said.

He added that he doesn't think the Federal Reserve is artifically propping up housing prices.

"World interest rates are low. Inflation is low. Real rates are low. I don't think even a point up on mortgage rates is going to kill this [housing] market."